Comcast Answers VoIP Call

UPDATED: Putting regional telecoms and startups on notice, Comcast
today announced a major Voice over IP rollout for 2005.

“We’re on a steady march,” Brian Roberts, Comcast CEO, said at the Smith Barney Citigroup
investor conference in Phoenix this afternoon. “[The estimates] are modest
for the first year or two.”

The largest cable operator plans to market its Digital Voice service to 15
million homes by year’s end, and the remainder of its homes by the end of
2007. Comcast’s goal is to have 8 million phone subscribers by 2010.

Customers with the service provider’s broadband Internet service will pay an
additional $39.95 per month for unlimited U.S. calling. On its own, the
phone service will cost $54.95 per month.

Comcast has been testing the
service in Indianapolis, Philadelphia and Springfield, Mass., for more than
a year.

It’s the latest in a back-and-forth battle among telecom carriers like
Verizon and SBC . Both Baby Bells are venturing
into Comcast territory.

By supplying battery backup to cable modems, Comcast Digital Voice customers
will have “the same reliability and quality from day one, as any of the Ma
Bell services,” Roberts said.

“It’s not our desire to do this to hurt phone companies,” Roberts added. “We
want to build value in phones … we’re not just doing this to reduce
prices or change the model.”

In addition to traditional phone rivals, cable operators must also vie with
VoIP startups, such as Vonage and Net2Phone for Internet voice customers.

Besides being able to bundle products with VoIP, Roberts contends that
Comcast’s quality will be superior to upstarts, because users’ voice packets
will travel over Comcast’s closed network rather than the public Internet.
That’s why Comcast can afford to charge about $10 to $15 more than some of
the smaller companies, he said.

He also believes scaling up the IP phone business won’t be difficult, since
the company already has back-end systems, including billing and 911, set up
for its existing circuit-switched phone service. About 1,000 Comcast
employees support phone customers.

Other cable companies have also added VoIP to their offerings, including
Time Warner Cable. The cable arm of the media giant recently activated
service in its New York and New Jersey markets.